Entry regulation and entrepreneurship: a natural experiment in German craftsmanship

Davud Rostam-Afschar

Empirical Economics, 2014, vol. 47, issue 3, 1067-1101

Abstract: This paper uses the 2004 amendment to the German Trade and Crafts Code as a natural experiment for assessing the causal effects of this reform on the probabilities of being self-employed and of transition into and out of self-employment. This is achieved by using repeated cross-sections (2002–2009) of German microcensus data. I apply the difference-in-differences technique for three groups of craftsmen which were subject to different intensities of treatment. The results show that the complete exemption from the educational entry requirement has fostered self-employment significantly by substantially increasing the entry probabilities, while exit rates have remained unaffected. I find similar, though weaker relative effects for the treatment groups that were subject to a reduction of entry costs or a partial exemption from the entry requirements. Moreover, I consider effect heterogeneity within each of the treatment groups with respect to gender and vocational training, and show that the deregulation of entry requirements has been most effective for untrained workers. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Entrepreneurship; Regulation; Firm entry; Natural experiment; Craftsmanship; L51; J24; I28; M13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (62)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00181-013-0773-7 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Entry Regulation and Entrepreneurship (2012)
Working Paper: Entry Regulation and Entrepreneurship: Empirical Evidence from a German Natural Experiment (2010)
Working Paper: Entry regulation and entrepreneurship: Empirical evidence from a German natural experiment (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:47:y:2014:i:3:p:1067-1101

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-013-0773-7

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().